International Trade in the Trump era

International Trade in the Trump era
The United States is the biggest economy in the world. Well, also over the past century, it has been the most open economy too. The reference currency is the US dollar and its capital markets became the centre of the financial world. Even competing against the best in the world, the US companies became the best in the world. For instance, US consumers got better goods, cheaper than they ever had before.

International Trade

Now in the uncertain future of international trade in the Tump era we can see that it won’t be easy for business and other countries and economies to deal with the US with such protectionist policies as we may see ahead. The recent decision of its president to withdraw the US from the Trans-Pacific Partnership (TPP) shows that he’s not kidding and is following his election campaign promises. NAFTA must be the next one to feel the hand of the new US president.

But what are his goals with this kind of politics?

A brief analysis of his government plan (  shows we can conclude that his economic vision is based on five main elements:

1 – A strong tax reduction for businesses, and also for families, to encourage growth.
2 – A modern regulatory framework, that is seeking to release the weight of regulation and bureaucracy over economic activity. Trump claims that the cost of bureaucracy amounts to about $2 trillion annually, with an impact on family income of $ 15,000 per year.
3 – Liberation of the potential in the energy sector. Increase business competitiveness reducing loss of energy and resources that should be used to generate wealth.
4 – Reduction of public spending at a rate of 1% per year, except for Defense and Security.
5 – A trade policy that puts America First.

These five pillars of his plan should support the creation of employment and wealth to make “America great again”. But is the world ready for paying this bill?

His goals seems to be very clear, but it’s contradictory with American history. Closing trade borders and closing borders to immigrants is against the nature of a US that was created from a British colonisation and built by people from all around the world. And also the US always takes advantage of trade negotiations having the world’s biggest multinationals all over the globe. And we cannot forget that even his actual wife is not native American.

International Trade in the Trump era

Now an American Citizen, Melania Trump was born in the Socialist Federal Republic of Yugoslavia in 1970.

The next campaign goal to be achieved is to build the wall at the Mexican border. Of course they have forgotten the old border used before the Invasion of Mexico in 1848. If you don´t know the history, just remember that Los Angeles, San Diego, Santa Barbara, San Francisco and several other cities in this area have Spanish names not just by coincidence but because they were in Mexican territory once. And they are in fact the richest region of the US nowadays.

International Trade in the Trump era

Mexican border before the Mexico War 1848.

Considering the first few weeks of government, international trade in the Trump era won’t be easy for any country, including the US.


Author: Murilo Branco